STONE are unique tokens that can be utilized to help stabilize EWAND price around peg (1 JOE) by reducing circulating supply of EWAND if the TWAP (time-weighted-average-price) goes below peg (1 JOE).
STONE can be purchased only on contraction periods, when TWAP of EWAND is below 1.
Every new epoch on contraction periods, STONEs are issued in the amount of 3% of current EWAND circulating supply, with a max debt amount of 35%. This means that if bonds reach 35% of circulating supply of EWAND, no more bonds will be issued.
Note: CLOAK TWAP (time-weighted average price) is based on STONE price TWAP from the previous epoch as it ends. This mean that EWAND TWAP is real-time and STONE TWAP is not.
You can buy STONE if any are available, through the Bond on Deathtly hallows Finance, anyone can buy as many STONE as they want as long as they have enough EWAND to pay for them.
There is a limit amount (3% of EWAND current circulating supply) of available STONE per epoch while on contraction periods, and are sold as first come first serve.
First and most important reason is Bonds help maintain the peg, but will not be the only measure use to keep the protocol on track, more on that on DAO Fund section.
STONE don't have a expiration date, so you can view them as a investment on the protocol, because long term you get benefits from holding bonds.
The idea is to reward STONE buyers for helping the protocol, while also protecting the protocol from being manipulated from big players.
So after you buy STONE using EWAND, you get 2 possible ways to get your EWAND back:
- 1.Sell back your STONE for EWAND while peg is between 1 - 1.1 (1 JOE) with no redemption bonus. This to prevent instant dump after peg is recovered
- 2.Sell back your STONE for EWAND while peg is above 1.1 (JOE) with a bonus redemption rate
STONE TWAP (time-weighted average price) is based on EWAND price TWAP from the previous epoch as it ends. This mean that EWAND TWAP is real-time and STONE TWAP is not. In other words, you can redeem STONE for a bonus when the previous epoch's TWAP > 1.1.